NY Times: IBM-China Partnership Interferes With White House

A partnership between China and computer giant IBM is raising eyebrows in some circles, and it's bumping into efforts made by the White House.

A New York Times report details IBM's China project, in which it is providing a Chinese company with partial blueprints for its high-end servers and accompanying software. The goal is for China to be able to produce its own computer hardware, thus shedding its reliance on U.S.-made products.

But the partnership, according to the Times, is running up against the Obama administration's efforts to persuade China to halt its policy of requiring U.S.-based companies to pull the lid off their technology to gain access to the Chinese market.

Further, the man spearheading the operation between IBM and Chinese company Teamsun used to work for the Chinese government and was responsible for the cybersecurity of China's strategic missile arsenal, according to the Times. Shen Changxiang, now 74, also led the Chinese navy's computer security research.

Critics of the program, reports the Times, say IBM's actions will force other companies to do the same thing to stay competitive in the Chinese market.

"People do feel angry about what appears to be an accommodation with the Chinese," James A. Lewis, a Center for Strategic and International Studies analyst, told the Times. "You have to kind of expect that, particularly at a time when you have the whole U.S. government ginned up to push the Chinese on this."

IBM, on the other hand, told the Times it is only trying to comply with a program called Open Power that was started in 2013. The global program has 120 members, including other tech giants Google and Samsung. Its goal is to provide technology that can eventually be used to jump-start partnership and business opportunities, according to the Times.

"Our Open Power partners in China are getting access to the same technology that we make available to all Open Power members around the world," IBM spokesman Edward Barbini told the Times. "We've been very transparent with all our stakeholders on this strategy, including the Obama administration, about our plans to expand both the Open Power community and IBM's technology partnerships around the world."

IBM, reports the Times, is also involved in other business projects in China related to helping companies with their servers.

China has pressed forward with projects that would make it more self-sufficient when it comes to tech products, particularly in the wake of former NSA contractor Edward Snowden's revelations that the U.S. spied on foreign leaders and governments.

Shen, according to the Times, said last year that high-tech products made in and shipped from the U.S. are "huge security risks" to China.

It was reported over the weekend that China is trying to boost its economy by lowering its reserve requirement ratio by 1 percent. It now sits at 18.5 percent.

Also, according to satellite images, China is building a runway on a disputed island in the South China Sea.

The construction on Fiery Cross Reef — part of the Spratly Islands, which are claimed by China, the Philippines, and Vietnam — shows a runway being built that could stretch to about 10,000 feet, which would make it capable of handling military fighter jets and surveillance aircraft.